Health Law Advocates Cautions Residents About the Purchase of Discount Health Plans

Health Law Advocates (HLA) is committed to assisting low- and moderate-income consumers across Massachusetts in accessing affordable, comprehensive health care coverage.  Recently, HLA has received consumer inquiries regarding out-of-state discount health plans that are offered to residents of the Commonwealth.  Discount health plans are not health insurance.   These health plans do not provide the comprehensive coverage.  While these plans appear to offer affordable, low cost alternatives to comprehensive health insurance coverage, they leave residents exposed to medical debt. Furthermore, these plans may subject residents to tax penalties for noncompliance with the Commonwealth’s minimum creditable coverage requirement and health insurance mandate. 

For more information, please see the links below:

• HLA has produced a fact sheet for consumers on the risks associated with purchasing a discount health plan.
• The Office of Consumer Affair and Business Regulation issued a 2010 bulletin regarding “Requirements for  Disclosure of Minimum Creditable Coverage” in the Commonwealth  of Massachusetts; 
• The Commonwealth Health Insurance Connector Authority offers an explanation of minimum credible coverage.
• The California Department of Insurance issued a cease and desist order in 2011 against a discount health plan. 
• Consumer Reports published an article in its March 2012 issue titled “Junk health insurance - stingy plans may be worse than none at all.”  

Residents of the Commonwealth are encouraged to purchase a comprehensive health plan—one that will not leave consumers with medical debt.  Residents are encouraged to visit the Health Connector website to review private health plan options.